Move over, disruption. Innovation is about to get a lot more destructive—and competitive—at NYU Stern.
Last week, Stern announced the launch of the Creative Destruction Lab–New York City (CDL-NYC), an immersive program designed to support entrepreneurial endeavors in science and technology.
The new program, designed to work with pre-seed startups in these fields and to pair them with resources in both academia and industry, is being lauded as the first of its kind in the United States, and is to be operated in partnership with the University of Toronto’s Rotman School of Management.
“By establishing the first Creative Destruction Lab in the country here in downtown New York City at NYU Stern, we are signalling our commitment to deepening our existing infrastructure in entrepreneurship education,” said Raghu Sundaram, Vice Dean for MBA Programs and Online Learning, in Stern’s October 10 press release on the CDL-NYC. “Building on NYU’s history of innovation, we look to be a hub that matches inspired ideas with the expertise to scale and commercialize them—and develop MBA students in the process who may want to follow a similar entrepreneurial path in the future.”
At Stern, the model will guide accepted startups through a nine-month program, with objectives for various deliverables pre-scheduled in eight-week intervals, according to the press release. On each delivery date, the startups will have full-day workshops with the G7, a seven-member panel of investors and entrepreneurs guiding the process for all accepted initiatives. If startups don’t successfully meet the requirements expected of them in a given interval, they will be asked to leave the program. At each step, startups will have the ability to collaborate with entrepreneurs (in particular, founders of successful ventures in science and technology), angel investors, and Stern MBA students and faculty.
The first CDL-modelled program, pioneered by the Rotman School of Management in 2012, is not alone in its quick success. The model has become pervasive in Canadian higher education institutions.
The programs in Canada have had successful startups with machine learning, health and life science, environment- and consumer-based focuses. Take, for example, QuWare, a company that can mass-produce chips to harness quantum light for 3D, deep-tissue imaging. Or Cube, a company dedicated to ensuring the strength and accuracy of computer models, to avoid data- and modeling-based failures. Kiwi.ai is a CDL company that makes software to help people quit smoking, and H2 Nano makes reusable particles to remove contaminants from toxic waste pools. The CDL platform, clearly, churns out projects from a wide range of industries and applications within those industries. CDL Toronto, where the model was established, has generated more than $1 billion of equity value creation in the five years since it was founded in 2012.
The first expansion outside of Canada can be found at NYU. Startups accepted into CDL-NYC then workshop their initiatives with advisors, called Chief Scientists, from various NYU programs. Collaborators from the Courant Institute of Mathematical Sciences, the School of Medicine, and the Tandon School of Engineering are all engaged in guiding the scientific and technical aspects of each startup.
Stern comes into play as a liaison to industry professionals and business academics, serving as a crucial platform that enables startups to leverage connections and to successfully activate their market entry strategy. Stern, as a heavyweight player in New York City with established strengths in areas like fintech and Entertainment, Media & Technology, amplifies the benefits of the CDL program through its location and its already robust network of faculty, alumni, and industry contacts. In more concrete terms, CDL-NYC will also be launching a CDL course, in which MBA students can enroll and consult the startups in an experiential classroom setting.
The announcement comes on the heels of a profusion of new programs offered by Stern; from the specialized 1-year Fashion & Luxury MBA and Tech MBA programs, to the latest Executive MBA program expansion in Washington, D.C., the school has launched many resource-intensive initiatives in the past couple of years. That, combined with the already well-established W. R. Berkley Innovation Labs—built upon ideas of “disruptive innovation,” as heralded by faculty like Professor Luke Williams—can make CDL-NYC seem like too much, too soon, with an M.O. not substantially different from that of the Berkeley Center.
One might wonder what’s in it for Stern, to be involved in yet another new initiative—and one that has the potential to be considerably capital-intensive. A strong reputation, certainly, is a goal that shouldn’t be overlooked, now that Stern has jumped in with both feet; because the school has worked very hard to brand this program as a trailblazer, both Stern and the CDL model structure has a lot to live up to in the coming years.
Beyond reputational implications, initiatives like CDL-NYC have the potential to benefit Stern in a number of ways. For one, the program is a rich addition to Stern’s experiential learning curriculum. Consulting in real-time for a group of startups—particularly such a potentially strong cohort of them, given the program’s pre-selection process—gives MBA students a unique opportunity to provide tangible consultation, and to see its impact in real-time through an entrepreneurial lens. Many of the experiential courses currently available to Stern students, such as the Consulting Lab: Branding course, frequently work with large-scale companies like American Express to work on a particular initiative. There’s a lack of a safety net, one may argue, in the CDL-NYC’s model—a shift in the curriculum that may lead to a different plan of attack from the students involved in the course. That calculated insight, paired with a startup already selected for its merits and its potential, is a powerful combination.
And that powerful combination will have access to a wide range of NYU resources, beyond the immediate scope of the CDL’s nine-month structure. For one, startups that successfully move through the program can work to attract investment from the G7 advisors they spend the nine-month program working with.
In addition, CDL-NYC is unique when compared to Stern’s other entrepreneurial initiatives: applicants to this new program need not be NYU graduates to be eligible for participation, as per the program’s website. Although this welcomes a strong new incoming “class,” it also invites new competition from a field compiled with potential selection bias, that may leave initiatives long-housed in NYU to face fiercer competition.
Take, in particular, the $300K Entrepreneurs Challenge. The challenge has historically been closed to startups outside of the NYU community. However, as Stern’s press release notes, CDL-NYC projects would have access to “several complementary services for entrepreneurs,” such as NYU’s Leslie eLab (for prototyping)—and the $300K Entrepreneurs Challenge, when they become part of the NYU community through their acceptance into CDL-NYC.
The CDL model is, at its core, meant to target “massively-scalable” initiatives in science and technology. In essence, this implies that the startups accepted into CDL-NYC would have intrinsic potential for such growth. In a best-case scenario, that would mean that Stern would be welcoming a cohort full of potential. This best-case scenario may improve the stats for many of NYU’s programs; the mean success rate for prototypes out of the Leslie eLab may increase, and the mean success rate of (and, maybe, investment attracted by) winners of the $300K Entrepreneurs Challenge may also see a boost. Such is the joy of being able to boast numbers, instead of distribution curves, in press releases. But this improvement in some general stats may prove to be the result of selection bias that routes resources from NYU-founded to initiatives that were already more likely to succeed.
Such strong competition, of course, isn’t a bad thing—a rising tide lifts all boats, as they say. But it may get a little crowded for the boats already docked when the big ships come into port.
CDL-NYC will begin accepting applications from eligible startups on January 1, 2018 and expects to admit about 25 ventures in the first year. Applicants can be graduates from universities other than NYU. The program will begin in September 2018.